Country Focus

Cost of Living Range: $1120 – $3500. This is an estimated price for the living costs of two people. 

Currency: Panama Balboa; 1:1 with the US dollar.

Expat Scene: Thanks to the county´s pensioner visa and its flexible requirements, most foreigners in Panama are retirees. You can also encounter younger expats, like digital nomads or long-term bag packers, especially in touristic areas such as Bocas del Toro and Chiriqui.

Internet: The most important cities like Panama, Colin or Chiriqui have very good high-speed internet service. In remote areas it is possible to find services such as DSL, cable or satellite internet.

 

Average Local Salary: An average salary for a middle class person in Panama is about 1,200 usd. In smaller cities and rural areas the salary is lower, being the monthly income close to 550usd. This, of course, varies depending on the city.

Safety: The country is relatively safe, especially when comparing with other important Latin American regions.

Visas: many countries do not require a visa to enter Panama. 

Possible Issues: Water and power shut downs are common in the rural areas of the country. 

Child Friendliness: Most important cities in Panama have at least one international school. There are several high-quality educational centers.

         Water: It is safe to drink water from the tap. It is advisable not to drink tap water in areas like Boca del Toro, Guna Yala or near the beach area. 

• Contrary to popular belief and general misinformation, Panama is not an offshore tax haven. In fact, due to the pressure placed on Panama by the OECD, this country has agreed to be part of the common reporting standards (CRS). However, Panama is one of the few countries in the world which does not tax foreign sourced income. This means that, with the proper structure, in Panama you can obtain the benefits of an onshore jurisdiction while enjoying the tax benefits of a haven. In this regard Panama has modeled its legislation and future growth on the Singapore model.
• Panama has recently signed a variety of agreements with China. As a result, an important flow of Chinese investment is coming to all areas of Panamanian economy, from banking to real estate. This means that Panama´s economy is set to boom in the next ten years. The country requires people with vision and skills to develop its economy, for this reason the government has made available some interesting opportunities such as tax breaks on many activities.
• Panama Real estate and lifestyle is very similar to Miami´s, only at prices that the city in the state of Florida was offering twenty years ago. In Panama, real estate is available for purchase at amazingly low prices. Buying real estate, including commercial, farmland or apartments is incredibly easy, and Panama holds no restrictions on foreign ownership.
• Panama offers some of the best lifestyles in Latin America. It has beaches, mountains, islands and farmland, all within close proximity to one of the most vibrant cities in the region. Panama´s city life offers everything you could possibly dream of, from restaurants to casinos, from high-level resorts to an interesting nightlife, all of this with almost no restrictions on personal freedom. At the same time, Panamanian people are relaxed and friendly, and, most importantly, are really fond of foreigners. There is a very low rate of violent crime, Panama being one of the safest countries in Latin America and even in the entire world.

The expansion of the Panama Canal was estimated to have a cost of 5.3 billion dollars. Thanks to this expansion new business opportunities are now available in the country for foreign investors and managers.

Below we list some of the business sectors open to be exploited in Panama:

-Procurement in relation to the Canal´s daily operations. This includes provisions, equipment, construction, consulting and others. 

-Concessionaire services to the ports of the Panama Canal. This includes maintenance, power and water supplies, fuel, food, materials, repair, telecommunications, banking).

-Logistics and cargo industries

-Services such as security consultants, trainers, providers

-Financial consulting

-Services for owners of ships such as repair, maintenance, servicing of vessels.

However, Panama does not only offer business opportunities in the maritime sector. On the contrary, there are other economic and financial sectors open for foreign investment and management. Some of these sectors are the following:

• eco-tourism and tourism
• textiles
• chemicals and pharmaceuticals
• power and renewable energy
• electricity generation, transmission and distribution
• agriculture
• toiletries
• information and telecommunication technology
• construction and infrastructure development, real estate development
• food and drink services

The main asset of Panama´s economy is the Panama Canal, which is one of the major works of engineering of the 20th century. The Canal is 77 kilometres long and connects the Pacific and Atlantic Oceans, providing many job opportunities for the local population. 

Now we will analyse some of Panama´s most important business areas, which represent great investment and business opportunities for foreigners. 

Panama’s CFZ and EPZs

Panama has several Free Trade zones and special economic areas, which offer a wide range of business benefits and migratory incentives.

The Colon Free Zone is a very good example of this. This Free Zone is located on the Atlantic side of Panama and is the second largest duty free zone in the world after Hong Kong and the largest in the western hemisphere. Many companies operate in the Free Zone, which makes it the main driving force for the economy not only of the country but of the region. Moreover, companies in the Colon Free Zone are exempt from income taxes.

Manufacturers usually prefer the Export processing Zones (EPZ), due to its tax exemption benefits, including exemptions from license and custom duties. For manufacturers who are not in these zones, there are tax incentives available in the form of Industrial Promotion Certificates. These incentives are also available for agro-industry, marine resources and other business areas. 

Another special zone is Ciudad del Saber, literally translated as City of Knowledge. A former territory of the Canal, this is a very important centre for innovation and knowledge exchange. This centre combines research, different studies and business. International companies usually choose to establish here due to the zone´s income tax exemptions and other benefits. It is also a great place for locals to find job in international companies. 

Panama City, expats´ favourite destination 

For obvious reasons, most foreigners are attracted to Panama City, Panama´s capital and largest city. The city itself has a population of almost one million people, but in the metropolitan area the population reaches 1.6 million. 

Located on the Pacific side of the Panama Canal, Panama City is the most important commerce, trading, shipping, financial and banking centre of the region. Being called the “Switzerland of the Americas”, Panama´s banking system is famous for its stability and confidentiality. 

The capital generates more than half of the country´s GDP, due to the large amount of businesses and commercial premises located in the city and its metropolitan area. 

In addition, Panama is very well connected to the rest of the world by the Tocumen airport, the most important and busiest airport in Central America. 

Colon and David

Colon and David are Panama´s second and third cities. Colon is located on the Caribbean cost at the other end of the Panama Canal. The most attractive feature of Colon is the Colon Free Zone, which is the largest of the western hemisphere. Unfortunately, Colon is known for its high rate of unemployment, poverty and crime due to a serious economic decline that took place between 1968 and 1989. 

David is located on the western Atlantic coast near the border with Costa Rica. Its population hardly reaches the 100,000 people. David is the main agricultural centre of the country and serves as a financial hub for the whole region. Many international banks have branches in David.

David is also an important centre for manufacturing and heavy industry, also being one of the most industrialised cities in the country.

It has an airport with daily flights to and from Panama City and an important flow of tourists, thanks to its developed infrastructure, active nightlife and excellent cuisine. 

In Panama, both labour and unit costs are high, a factor that has contributed to the nation experiencing a slowdown in its industry growth. This, for example, affects the sector’s development towards economies of scale; its small market is being impeded by the two factors already mentioned. Although construction, mining and milling are the main sectors of Panamanian industry today, its growth rate in 2009 did not exceed 0.4% according to reports issued by the CIA.

Due to external situations, as the proximity of the U.S. to countries such as Mexico, putting consequently greater advantages around labour and unit costs for its low cost, Panama does not seem to have wide growth possibilities in the industrial and manufacturing fields. The strength that Panama has so far, is in the services area, which is structural to the country’s economy.

Main sectors of the Panamanian industry

The following is a brief overview of the sectors of Panamanian industry according to data from 2009, where it was observed that it represented 18% of the employment generated.

1.Construction Sector

This sector has been the most representative of Panama’s economy, especially due to the investment made in the Panama Canal by the U.S. Its contribution to the country’s GDP is 5%. By 2007 it had an important expansion, also associated with the mega engineering project that was the Panama Canal.

2.Maritime Industry

The maritime industry sector in Panama contributes 20% of the nation’s GDP, in addition to being the fastest growing. To show this, we know that in 2008 this sector sent more than 3 million TEUs, which evidences a remarkable growth. The Panama Maritime Authority is the entity that governs all port transactions related to this jurisdiction.

3.Energy Sector

 Although the energy sector is mainly dominated by oil, it also has important perspectives and actions around electricity, where the government has sought to concretize projects among other Central American countries to connect electricity grids in the area and increase the exportation of this energy generation. On the other hand, important investments have been made for its development, by the hand of the USA, for example with the subsidiary Texaco, punctually regarding oil. In Panama, this subsidiary operates a refinery with a production capacity of more than 60,000 barrels per day, with more than 8,000 barrels per day for the export market. The project to build an oil pipeline from Colombia to Panama has a budget of 400 million American dollars, in order to satisfy the nation’s energy needs.

4. Agriculture Sector

The agricultural sector in Panama became, a couple of centuries ago, the country’s main productive activity. In the twentieth century, the construction of the Panama Canal changed this scenario, as it then became the main economic activity for the Central American country. Even in the mid-twentieth century, the relevance of agricultural activity consisted of representing 29% of GDP. Today, the decline is evident, since, although it had its lowest peak in the year ’85 with 9%, today it contributes 17% of GDP. Foreign corporations, such as the American Chiquita Land Company, hold part of the extensions of Panamanian land intended for agriculture (approximately 50% of the national territory is destined for this activity). Agricultural activity is divided into forests (4.1 million ha), permanent crops (0.58 million ha) and grazing (1.2 million ha). Some of the main items are bananas, shrimp, coffee and sugar. Additionally, beer is an industry that has been growing recently in the country, this is observed by the increase per capita of beer consumption that has occurred over the last few years. In 2017 there was a growth of 11.8%. 

5. Services

The services sector represents 64.4% of GDP, the greatest and largest contributor. Among transport, financial services and those related to them are areas of the sector that support this activity. The Panama Canal, for example, is the major income source for the country. Along with this, services associated with logistics and storage due to its port nature. Just to give a reference, over 14,000 vessels pass through the Panama Canal annually. Financial services, as already mentioned, make a very important contribution, despite not having a Central Bank. The reputation that Panama once had for being called a tax haven or other associated adjectives caused financial services to decline. On the other hand, the insurance activity also holds an important position, especially regarding vehicle insurance, which is mandatory for the entire vehicle fleet operating in the country. The Colon Free Zone is also another area of contribution for its rank in terms of other countries in Latin America and North America.

6. Panama’s imports and exports

In this area, imports surpass exports, at least in 2014, with a difference of approximately 7 billion between them. Panama exports agricultural products, gold, iron, among other things. Its imports are oil, pharmaceutical products, vehicles, among others. The following table shows the main exporting and importing countries and regions and their percentage relationship with Panama:

País / Región	% Export	% Import
United States	24%	20,9%
Canada	16,2%	–
European Union	15,1%	–
China	–	14,8%
Mexico	–	13,6%
Costa Rica	–	10,6%

Despite the challenges facing the industry in Panama, its growth is indisputable. Its GDP has positioned itself as the third largest in Central America, with a growth rate of 12.1%. This growth, despite being accelerated especially in recent years, does not neglect the attention to poverty in the country, since according to United Nations data, between 2001 and 2007, poverty was reduced from 37% to 29%. A major challenge remains inequality, given the marked differences between those who have the most and those who have the least.

Despite the challenges facing the industry in Panama, its growth is indisputable. Its GDP has positioned itself as the third largest in Central America, with a growth rate of 12.1%. This growth, despite being accelerated especially in recent years, does not neglect the attention to poverty in the country, since according to United Nations data, between 2001 and 2007, poverty was reduced from 37% to 29%. A major challenge remains inequality, given the marked differences between those who have the most and those who have the least.

Panama, besides of being well-known by the picturesque hat and the so popular canal, has within its economy some characteristics and a number of economic advantages that not any would recognize at first sight.

Almost a quarter of the global transport fleet flies the Panamanian flag

An advantage that Panama offers around the developed economy of the Panama Canal is the facility it offers to cargo ships, for example, in terms of taxes and security requirements that, compared to developed countries, are much more flexible and cheaper. This is the reason why, despite being a country with a population that represents 0.05% of the global population, it has about 22% of the world fleet of vessels registered using the Panamanian flag. These official data are provided by the UN’s 2009 maritime transport report. The report revealed that 183,503 vessels were registered in this jurisdiction. Other countries, such as the Bahamas and Cyprus, give this advantage to navigators and international companies, being able to see ships or vessels owned by Japanese, for example, with the Panamanian flag.

The Panama Canal represents about 40% of the country´s economy

We already know how tangible the channel’s contribution is to the country’s economy, representing approximately 40% of the economy. Due to its strategic geographical location, it allows ships to connect more quickly between the Pacific Ocean and the Caribbean Sea. This advantage offered by the channel is undoubtedly what allows the aforementioned revenues to be generated.

134 international companies have their headquarters in Panama

Another feature that has become a competitive advantage for Panama in recent years, has been the Multinational Operations Headquarters (SEM) program that allows multinational companies to register to become part of the platform which enables companies to establish themselves in Panama. Enterprises such as Dell, Nestlé, Nike, Diageo, among others, are just some of those already registered in the web portal managed by the Ministry of Commerce and Industry. It is evident that the comparative advantage that the country has due to its geographical location is something that these companies should take full advantage of at an international level. This is how today Panama has managed to attract more than USD 820 million in foreign investment and more than 5,000 employees.

 Panama’s GDP per capita nearly doubled between 2010 and 2015

Although poverty still exists in Panama, it is important to note that the economic performance and growth expected to exceed 6% annually, has allowed reducing this indicator rate by 10% between 2008 and 2014. An example of this is the way the average Panamanian’s salary has doubled in only 5 years, reaching USD 13,268 in 2015. The reports of international organizations such as the World Bank, among others, show Panama as the region where the fastest economic growth has been witness, positioning itself as the first in Latin America.

Panama accounts for nearly half of all the FDI flowing into Central America

Among other things, the foreign direct investment (FDI) policy sustained by Panama’s transitory governments has allowed the country to become the recipient of half of Central America’s foreign investment.  According to World Bank data, approximately 40% of foreign investment goes to the Central American country. This represented about USD 12.3 billion to the region, corresponding to USD 5.8 billion to Panama.

To sum up, by getting to know more about the economic benefits of Panama, you can find out about the possibilities this country offers for business and investment. 

This is a permanent residency which is granted within 3 months of the filing of the application, with the first residence document issued within 2 weeks and the final permit after 3 months. The visa is open to passport holders (citizens) of 42 countries including the European Union, United States, Mexico, Brazil, Taiwan, Chile, Australia and New Zealand [for full list click here].

The applicant only needs to place 5000 USD in a local bank account and open a company with the intention of doing business. There are no further requirements, no language requirement, no requirement for qualifications, and no investment requirements. Yes, it is that simple and many people from around the world are taking the opportunity while it is available. This programme is so simple because Panama has a shortage of talented people and a general shortage of population, so foreigners are more than welcome.

One more thing: after five years, the applicant is entitled to apply for citizenship which is granted after a very easy citizenship exam. 

We almost forgot you do not have to live in Panama to maintain the residency. This is one of the few countries in the world where you can maintain your residency by simply having an address here and visiting only once every two years.

Friendly nations visa required immigration documents

Law 3 of 2008 under Article 28 requires the following documents from an applicant:

1. Eight (8) Passport Size Photos Per Applicant;

2. Criminal history background check from the applicant’s country of origin or the country where he/she has lived for the two past years. The Panama immigration department requires the applicant to provide an authenticated criminal history report issued by a “federal”, “central”, or “national” police force or criminal investigation authority. This document must be authenticated by the Embassy or Consulate of Panama, or Apostilled. If the applicant provides a criminal background check from another country they must also provide an identification from said country which can be a drivers license or any other government issued ID.

(a) If the applicant is providing a criminal background report from a country where he/she is not a citizen, but a resident, the applicant must provide the legal residency identification, of said country, which must be authenticated by the Embassy or Consulate of Panama, or Apostilled.

(b) If the applicant has been residing in Panama for the past two consecutive years (without leaving the country) the criminal background check must be prepared by the national police (DIJ) in Panama.

Panama immigration will require the national criminal history report to be authenticated by a Panamanian Embassy or Consulate, from the country that issued the document or by Apostille, which is an internationally recognized government agency authentication of its issued documents by attaching certain seals to the document. Contact Us for a list of Panama Consulates Worldwide or learn more about an apostille.

Note 1: The criminal history background check has a validity term of 3 to 6 months from its issuance date, depending on the specific nationality of the client / applicant, according to the Immigration Department of Panama.

Note 2: Between the issuance date of your criminal history background check, and your Provisional Residency application, there can be only “one (1) entry stamp” in your passport in the Republic of Panama. This means that after the date of your last trip to the Republic of Panama (Stage 1), and prior to your following trip for your provisional residency application (Stage 2), you must process your Criminal history background check (Police Report) as explained previously in the required documents.

3. A written Statement describing the economic or professional activities to be conducted by the applicant in Panama. These can be explained in the following manner:

Option (a) Economic Activity: Provide documentation that the applicant is a member of the Board of Directors or majority shareholder (50%) of a Panama Corporation or is the owner of a Panama company. If the Panama Corporation or Panama Company is new, provide proof of its franchise tax being paid. If the corporation or company is over one year old, provide proof of its tax return, and good standing certificate. In other words, the applicant must set up a Panama Corporation and be appointed in the Board of Directors. This Corporation must be existent until the Residency process is approved. Under the current law, the corporation does not need to be active in business, it simply needs to be formed (inscribed in the Public Registry of Panama).

Note: The economic activity of the company cannot be one reserved for Panamanian nationals such as a retail business.

Option (b) Professional Activity: A professional activity is a job or work contract with a Panamanian company. The applicant must provide proof of an employment contract, the company must be registered with Panama Social Security, and the applicant must get a social security card and work permit. There are several ways to obtain a Panama work permit including the allowable 10% foreign employees or the Marrakech Treaty (which allows Panamanian companies to hire a certain percentage of foreigners). The professional activity cannot be one reserved only for Panama nationals such as an attorney, architect, engineer, medical doctor or veterinarian doctor.

4. Copy of Applicant’s second I.D. (other than Passport): Issued from applicant’s country of origin, such as a driver’s license or government issued photo I.D. This requirement is in addition to the passport to prove residency and citizenship. This document must be Apostilled or authenticated by a Panamanian Consulate where the document is issued. If you do not possess a second ID from your country of origin you can provide a birth certificate that is apostilled or authenticated by the Panamanian consulate in the country of issuance.

5. Proof of Solvency: In addition to the documents that demonstrate the applicant’s economic or professional activity the applicant must also provide the following:

(a) Proof from a Panama bank that the applicant has at least $5,000 USD deposited, plus $2,000 USD for each dependent – this is done by requesting a bank letter of reference; or

(b) Proof of income such as employment salary with a letter from the employer which includes applicant’s social security number and work permit. Note: Part (b) is vague which can be interpreted by Panama immigration at its discretion to verify the applicant’s solvency.

6. Dependants require a letter of responsibility from the primary applicant (we will draft this letter of responsibility).

(a) Client must provide proof that the dependants are related either with a “birth certificate”, if children, or if it’s a spouse, a “marriage certificate”. This document must be Apostilled or authenticated by a Panamanian Consulate where the document is issued. This document must be issued within six (6) months before the residency application date (this means that at the time of application, this document should not be over 6 months old).

(b) Dependants other than a spouse can apply up until the age of 25 if enrolled as full time university students or are disabled, and must provide an authenticated certificate of single status (not married).

(c) Dependants over the age of 18 must submit an affidavit that they are single (not married) which must be Apostilled or authenticated by a Panamanian consulate.

7. Personal Sworn Affidavit explaining the purpose for seeking Panama Permanent Residency and ability to support family and dependents. (This form will be supplied by Panama Offshore Legal Service’s immigration attorney.) In “summary”, client must provide the following documents:

1. Eight (8) passport size photos.

2. Criminal history background check, duly authenticated by the Embassy or Consulate of Panama, or Apostilled.

3. Copy of Applicant’s second I.D. (different than Passport) from applicant’s country of origin such as driver’s license or government issued photo I.D., duly authenticated by the Embassy or Consulate of Panama, or Apostilled.

4. Birth certificate, if dependants are children, or if dependant is a spouse, a Marriage certificate, duly authenticated by the Embassy or Consulate of Panama, or Apostilled.

5. A bank reference letter, from a licensed bank in Panama, addressed to: “Servicio Nacional de Migracion”, that certifies that the applicant has at least US$5,000 USD deposited in a “personal bank account” (in clients personal name) plus the amount of US$2,000 USD must be deposited for each dependant.

6. Certification from the Public Registry of Panama, certifying that the applicant appears on the board of directors of the Panama Corporation. CONTACT US

Required Documents:

1. Application for Permanent Residency with a Special Power of Attorney authorizing our Law Firm (Panama Offshore Legal Services) to act on behalf of the applicant, duly authenticated by a Panamanian Public Notary with the proper government stamps.

2. Copy of the entire passport notarized by a Panama Public Notary.

3. Original medical examination report from a certified Panama medical doctor. Our paralegal will personally accompany Client to the clinic for the medical examination.

4. Two Certified Checks:

(a) $250 USD in favor of “Tesoro Nacional” (National Treasury) for immigration fees; and

(b) $800 USD in favor of “Servicio Nacional de Migracion” (National Immigration Service) for repatriation purposes (deportation fund).

IMPORTANT: Once immigration has issued a resolution of an approval (or denial) of the application of residency, the above mentioned checks are then non-refundable.

5. Official translations, signed by a licensed official public translator from the Republic of Panama, of all documents from the English to the Spanish language. If documents are in a different language than English and Spanish, then the Client must pay the fees of the respective licensed official public translator in Panama to translate the documents from whatever language they are in to Spanish.

About the Friendly Nations Visa program

In May of 2012, President Ricardo Martinelli issued a Presidential Decree 343 declaring that citizens of 22 friendly nations could apply to become permanent residents in a fast track manner.

Since then, other Decrees have increased the number of friendly nations to 50.

The formal wording of this permanent Panama residency visa is for “citizens of friendly nations with professional and economic ties with the Republic of Panama”. CONTACT US

List of 50 Friendly Nations for Panama Visa

    Great Britain

    Germany

    Argentina

    Australia

    Republic of Korea

    Austria

    Brazil

    Belgium

    Canada

    Spain

    USA

    Slovakia

    France

    Finland

    Netherlands

    Ireland

    Japan

    Norway

    Czech Republic

    Switzerland

    Singapore

    Uruguay

    Chile

    Sweden

    Poland

    Hungary

    Greece

    Portugal

    Croatia

    Estonia

    Lithuania

    Latvia

    Cyprus

    Malta

    Serbia

    Montenegro

    Israel

    Denmark

    South Africa

    New Zealand

    Hong Kong

    Luxembourg

    Liechtenstein

    Monaco

    Andorra

    San Marino

    Taiwan

    Costa Rica

    Mexico

    Paraguay

Clarifying the Residency Requirements

The words “professional and economic ties with the Republic of Panama” means that citizens of these 50 countries must establish professional or economic relationship with Panama. This can be accomplished by either of the following two options:

Option 1: Set up a new Panama corporation (or purchase an existing Panama corporation)

This option proves an “Economic Activity”, which means the applicant owns a Panama corporation (either a newly set-up corporation, or purchase an existing corporation) which does business in Panama. Please note that Foreigners (non-Panamanian citizens) are prohibited from owning a Panama “Retail” business.

Option 2: Be hired to work as an employee for an existing Panama corporation

This alternative option proves “Professional Activity”, meaning the applicant must be employed by a professional Panama corporation, must obtain a Panama work permit, and must be registered with Panama’s Social Security system. In this case, proof of income such as the employment wages must be provided by the employer. Documents proving these activities must be submitted. Please note that Foreigners (non-Panamanian citizens) are prohibited from practicing certain professions such as: medical & veterinary doctors, attorneys, architects, and engineers.

In either of the above Options, Proof of Economic Solvency is a requirement. This requirement can be met by opening a Panama bank account, and depositing at least $5,000 USD (plus $2,000 for each dependant). Whether an applicant is solvent enough is not clearly defined, leaving the matter up to the discretion of the immigration officials.

Dependants include the spouse and children up to the age of 25 if they are full time university students. The applicant must provide a written letter of responsibility regarding the dependants. Every son or daughter dependant over the age of 18 must prove they are not married by providing an authenticated certificate of “single” status (not married) from their respective country.

After the application is filed along with all required documents the immigration office will issue a one year temporary residency card (carnet) which will be replaced by a permanent residency card once the application is approved.

Work permit

Once the application has been approved, the Client / Applicant can apply for a Work Permit. Panama’s President recently issued a Presidential Decree ordering Panama’s Ministry of Labor to fast track acceptance of work permits for the 50 friendly nation’s citizens.

Important documents and procedure

   Scheduling:  Client / Applicant(s) must contact our law offices with at least 30 days prior notice to schedule appointments & coordinate documentation that is required for immigration processing.  Please note that the immigration application process takes a total of approximately 7 to 9 business days, so plan on being in Panama City for at least that time frame.

   Document Validity: All required documents must be recently issued within 90 days (3 months) prior to the presentation of the Panama immigration residency application.

   Document Authentication:  All required documents for immigration processing must be apostilled or authenticated by the Panamanian Consulate in the country of issue.

   Document Review:  All required documents for immigration processing should be sent via scanned email or fax to our law offices for review and approval, at least 30 days prior to client / applicant(s) arrival in Panama.

   Document Preparation:  For highest level of efficiency and time savings during applicants’ trip to Panama, we recommend applicants’ to send to our law offices (by courier) all required and duly authenticated or apostilled documents, at least 2 weeks prior to applicants’ arrival in Panama.  This will allow our attorneys enough time to process the necessary authentications of the documents at the Ministry of Foreign Relations.

   Clients With Dual Nationalities:  If the Client / Applicant has two (2) different Nationalities (Passports), then at the moment of “entry” into the Country of Panama (at the airport or border), the client / applicant should enter Panama using the same Passport that will be used for the Panama Immigration residency application, and said passport should be stamped when entering Panama.  The required documents for immigration processing that the applicant must provide (police/criminal history report, etc.) must be issued in the same country of the applicants’ passport, because if not then the applicant would need to provide proof that they are residents in the country where the documents are issued from.

   Dress Code:

       For Men: Male Clients / Applicants must wear long pants, collared shirt, and shoes with socks. Do not wear shorts, cut-off shirts or t-shirts, or any footwear that shows toes.

       For Women:  Female Clients / Applicants must wear a dress or long pants, collared shirt or top that covers shoulders, and formal footwear (shoes).  No mini-skirts, shorts, cut-off shirts or tops showing shoulders or t-shirts, and no sandals or footwear that shows toes.

Visa Application Procedure & Stages

The following are the steps involved in applying for the residency program:

Stage 1 (Trip No.1 to Panama): Open a Personal Bank Account in Panama

The first step is to open a personal bank account in a licensed Bank in Panama. To begin the account opening process, you only need to be in Panama for 1 business day, to interview with the banker, sign the bank forms, and submit the required documentation to the bank.

The time frame for actually opening a personal bank account in Panama varies depending on what bank you open the account with. The bank account opening process can take 1 day or it could take as much as 1 month, depending on the bank you choose to open the account with, and depending on the supporting documents you provide to the bank, since all banks require doing a due diligence investigation on the client prior to the account approval. If you open the account through the banks that we recommend, and you provide all the required documentation, the account can be opened very quickly, in as little as 1 day in most cases. Once your personal bank account is approved by the bank, you need to fund it and make a minimum deposit of US$5,000.00 for qualifying for the residency process, plus you need to add US$2,000.00 per dependent you want to include.

Please contact us prior to your visit, if you want us to help you with setting up an interview with a bank officer to attend you. We will assist you through the account opening process and help you to come prepared so you don’t waste time.

Requirements for opening a bank account

The basic requirements by the bank for your personal bank account are:

   -Passport copy.

   -Second I.D. copy (for example: drivers license, state or country I.D.).

   -Original bank reference letter, addressed to the bank in Panama where you are applying to open the account. This letter should be issued within 3 months from the account application date and must contain an email or phone number from the issuing bank so that the bank in Panama can confirm the letter.

   -Annual tax declaration, employment letter, or retirement income document (document that proves your source of income). This requirement is very important since the bank needs to know how you make money or the source of your funds to be deposited to the account.

   -Personal resume / curriculum vitae, describing your education and work history.

   -Letter addressed to the bank, explaining the purpose of establishing the bank account, what banking services will be required such as checking/savings account, debit card, credit card, online banking, etc, the estimated monthly deposits / withdrawals, and estimated average balance of the account.

  -Any other documentation that the bank may require from the client / applicant.

   -Personal interview required at the bank.

We recommend that when you come to Panama, be prepared to interview with 2 different banks just in case, in order to assure that you will get an account opened, because some banks may deny the account, depending on the due diligence documentation provided. Stage 2 (Trip No.2 to Panama): Passport Registration and Provisional Residency Application:

In this Stage we would require your stay for minimum of 7 to 9 business days as follows:

BUSINESS DAY 1 (PASSPORT REGISTRATION)

   Client / Applicant(s) presence IS required. NOTE: No shorts, t-shirts or sandals are permitted in government offices.

   At 8:00 a.m. Client / Applicant(s) should meet at our law office with two (2) Passport size photographs, US$5.00 in cash, and the actual original physical passport in hand.

   At around 8:30 a.m., our Immigration Attorney and/or Paralegal will guide the Client(s) to the government Immigration office of Panama City.  The passport registration process is generally done in the same day, however, the time it takes will depend on the volume of applicants ahead of you in line, so the earlier you get there the better.

   The Panama immigration office will place a “stamp” in the applicants Passport that will show a Registration number, which is used throughout the immigration process, which is why it is also advisable that the passport used should have at least 1 to 2 years time remaining before the passport expiration date.  Once the passport is registered at the Panama Immigration office, the applicant will receive their passport back. Client should keep a photocopy of their passport and entry stamp page with them at all times in Panama.

BUSINESS DAY 2 & 3 (DOCUMENT PREPARATION)

   Client / Applicant(s) presence is NOT required.

   A complete photocopy of the applicants’ passport (including a copy of the Panama Immigration Registration stamp page) must be made and it must be authenticated by a Public Notary in Panama, which requires that we have the passport accessible.  If time permits, this step could be completed on Day 1.

   Other documents such as the Health Certificate (this can only be done in Panama, through a Licensed Medical Doctor in Panama), authentication of all documents, and translation to the Spanish language of all documents that are issued outside of Panama, etc.  There is a possibility that we could expedite the authentications and translations of documents, if the client / applicant(s) delivers all documents to our law office by courier prior to their arrival in Panama. By all means (as mentioned above), client should always scan and email or fax these documents to our law offices prior to their arrival in Panama, for verification purposes to ensure that the documents are prepared correctly.

BUSINESS DAY 4 (RESIDENCY APPLICATION PRESENTATION)

   Client / Applicant(s) presence is NOT required, however, we will need to keep applicant(s) original passport for the immigration application presentation.  The passport will be returned the same day or the following business day.

   If all documents are ready, authenticated, translated to Spanish, and the completed package with a full set of copies for the Immigration office is ready, then our Attorney/Paralegal will file the application by going to the Immigration office early in the morning.

BUSINESS DAY 5 (TEMPORARY RESIDENT CARD ISSUANCE)

   Client / Applicant(s) presence IS required.

   At 8:00 a.m., the client / applicant(s) should meet at our law office.

   At around 8:30 a.m. our Immigration Attorney / Paralegal will guide the Client / Applicant(s) to the government Immigration office for the Temporary Residency Card issuance. A photograph of the client / applicant(s) will be taken at the Immigration office, and the Client / Applicant will receive a “Temporary Resident Card” (I.D. Card). This card will have a validity of one (1) year, which means that within that one (1) year the Immigration office should approve the client / applicants’ residency resolution. From our experience, the Immigration office generally approves this residency program in 3 to 6 months time frame.

   Our attorney / paralegal will need to keep applicant(s) original Passport for the Multiple Entry-Exit Visa application & processing.

   Applicant(s) will keep their Temporary Residency Card and a photocopy of their Passport with a photocopy of the most recent entry to Panama stamped page.

BUSINESS DAY 6, 7 & 8 (MULTIPLE ENTRY-EXIT VISA APPLICATION AND PROCESSING

   Once the “Temporary Residency Card” is obtained, Client(s) / Applicant(s) require a Multiple Exit and Entry Visa, in order to exit and enter the country.

   Client / Applicant(s) presence is NOT required, however, our attorney / paralegal will need to have applicant(s) original passport for the presentation of the Multiple Entry-Exit Visa, which approval will take approximately 3 business days.  Applicant(s) will receive their original passport back once the Multiple Entry-Exit Visa is completed (3 business days).

   Our Attorney/Paralegal will file the application for the applicant(s) Multiple Entry-Exit Visa, which is required for applicant(s) to travel out of and into the Republic of Panama.

   IMPORTANT NOTE:  If you leave Panama without the Multiple Entry-Exit Visa, a fine of US$2,000.00 will be applied by the Immigration officials.

BUSINESS DAY 9 (RETURN OF PASSPORT & MULTIPLE ENTRY-EXIT VISA)

   Client / Applicant(s) presence is NOT required.

   Our Attorney / Paralegal will go to the Immigration office to collect applicant(s) original Passport with the stamp of the Multiple Entry-Exit Visa, and applicant(s) may pick up their passport(s) at our law office that afternoon. CONTACT US

NEXT STEPS

Once the residency application has been submitted, the Immigration office will take several months to process the resolution of approval. Our immigration attorney and paralegals will perform a weekly follow-up at the Immigration office and all the different departments where the paperwork is processed, and will inform you by email or phone, once the resolution of approval is issued, at which point you will need to return to Panama to continue the immigration process. Generally you will have a term of 3 months to come to Panama, once the resolution of approval is issued, so you will be informed in advance.

Stage 3 (Trip No.3 to Panama): Permanent Residency Approval (at the Immigration)

Once the permanent residency resolution is issued with the approval, you will have a term of 3 months to come to Panama to get your picture I.D. card at the Immigration office. One (1) business day is required for this process. Stage 4 (Trip No.4 to Panama): Permanent Residency Card (at the Civil Registry):

Once your permanent residency card is issued by the National Immigration Service, you could request the permanent residency card issued by the Civil Registry (“cedula”), which is optional.

This process, from Stage 3 till Stage 4, could take around 2 to 3 months, for the Immigration File to reach the Civil Registry. Then, the Client will be required to just come to Panama and stay 2 or 3 business days for this 4th stage.

Once our Immigration Attorney or Paralegal informs you that the permanent residency card is ready at the Civil Registry of Panama, you would need to make a trip for one (1) business day to sign the card and to take your picture at the Civil Registry.

Contrary to what its name suggests the retiree visa is open to all ages. All you have to prove is that you have a pension or fixed income from a government or private retirement fund of 1000 USD per person per month for life.

The retirement visa is a permanent residency which allows you to have up to 25% discount on all movie tickets, medical bills, restaurants and many other services. No wonder it is considered the most requested residency programme in the world today. If you can prove a steady income for life, then be quick! This programme will not last much longer as the government is due to tighten it.

One of the main requirements to opt for the Panama Pensioner Visa is to be retired or to enjoy a pension for the following years of life.

Another requisite of this program is that the foreign applicant has a guaranteed pension that he will receive throughout his life. There is no minimum or maximum age required to qualify for the program. You simply have to meet the requirements requested by the Department of Immigration of Panama mentioned below:

– Monthly Lifetime Pension

– Option I: Minimum pension amount (monthly income) of USD $ 1,000

– Option II: invest in real estate with a minimum of USD $100,000, and a minimum monthly pension of USD $750.

– Document issued by the company or institution that pays the retirement, notarized and authenticated by the Panamanian Consulate, as proof of the origin of said amount.

Note: it is important to point out that there is no age limit to apply for a retirement visa in Panama, the only major requirement is to have the aforementioned income.

Benefits

In order to continue convincing you about this great opportunity for your retirement years, we want to tell you some of the advantages of applying for and enjoying a Pension Visa in Panama:

 

– Up to $10,000 one-time tax exemption for the purchase of household goods. 

   -Exemption from duties every two years for the importation of a vehicle.

   – 50% discount on entertainment for any place in the country (cinema, theater, sports, etc).

    -30% discount on transport tickets (bus, plane, metro)

  – 25% discount on air tickets

    -50% discount on hotel accommodations between Mondays and Thursdays and 30% discount from Friday to Sunday

   – 25% discount in restaurants

    – 15% discount in fast food restaurants

   – 15% discount on hospital expenses (if you do not have insurance)

    – 10% discount on medicines (with proper prescription)

    – 20% discount on medical consultations

    – 15% discount on dental and eye exams

    – 20% discount on professional and technical services

    -50% discount on closing costs of mortgage loans

    -25% discount on public services

    -15% discount on loans made in the name of a pensioner

    -1% less on home mortgages used for personal residence

Requirements

The Panamanian government asks Pensioner Visa applicants for a series of requirements, namely:

1. Coverage letter from a pension administrator, or any institution or entity that can certify the existence of the applicant’s pension funds for life.
2. Certificate issued by the company that granted the pension and is the administrator of the applicant’s pension funds.
3. Pensioner’s bank statement (copy)

In addition, it is important to note that the legislation in this area, gives the applicant and spouse the option of opting for the pensioner visa if both pensions add up to $ 1,000 monthly.

On the other hand, the law that regulates this matter establishes a series of very specific guidelines for the case of the pensioner’s dependents. Some of these are explained below:

– The dependent children of the retiree may have a temporary resident visa until they reach the age of 25. The condition for reaching this age is that the dependent(s) are in full-time university studies.

– After reaching the established age, the dependent cannot continue his/her temporary resident visa by means of the pensioner visa managed by the person in charge, the initial applicant. If the dependent over 25 years of age wishes to remain in the country, he or she must apply for a visa for his or her case on an individual basis.

– The only exception established to extend the dependent’s pension visa after the age of 25 is in case he has a proven mental or physical condition or disability.

In the event that dependents are included in the pension visa application, an increase of USD $250 will be charged for each dependent or a reference letter from a bank in Panama showing that the applicant has a monthly income of at least USD $250 for local deposits.

Additional requirements

In addition to the basic requirements already mentioned, the Decree-Law establishes in its article 28 other important documents in order to qualify for the Pension Visa:

1-A letter certifying your retirement from a foreign government, international company or private enterprise, stating that the pension you receive is greater than $1,000 per month. Remember that, in the case of spouses, if the sum of both (yours and your spouse’s) pensions reaches $1,000 monthly, they are also eligible for the visa.

2. The application fee for inclusion of the dependent(s) (if any) is $250 each, to be paid to the National Immigration Service of Panama. 

Note: dependant children´s permission will be temporary until they turn 25 years old and only as long as they can prove to be studying in a university. These dependants will not have the right to extend their pensioner visa, except for those with mental or physical disabilities. 

3. If the applicant owns a real estate property, he/she must present the Certificate of Public Registry for that property.

4. If the pension is issued by a private company, the following requirements must be provided:

-Letter issued by an offshore administrator of companies, funds or bank, verifying that the applicant can ensure his monthly pension for life.

-Certificate proving that the company or entity administering the pension actually exists.

-Copy of pension payment statements.

5. In the case of pensions from a private company, you may submit in original and copy, updated and authenticated, a Certification from the Government Authority stating that the company paying the pension is up to date with its formal duties. The same process must be followed by the company paying the pension.

6. Proof of payment of pensions made by the entity to the applicant (authenticated).

7. Police record issued by the country of origin. It must be valid for no more than 5 years. It is required to present the original, the copy, updated and authenticated.

8. Marriage certificate (if applicable), birth certificate (for children or dependents under 18, if applicable). Like the above documents, they must also be original, copied, authenticated, and current.

NOTE: It must be well specified in the document that certifies that the income issued by the Government or Social Security is a Pension for life.  If in the document this is not specifically stated, then it will be necessary to present an Affidavit, in which the person swears that this income is actually a retirement income and that it is indeed for life. The Affidavit must be apostilled or authenticated.

Procedure

Now, having understood the requirements, we proceed to present the application process for residency in Panama:

1. Register your passport at the Immigration Department of Panama.
2. Submit documentation for residence, with all fees paid.
3. You will receive from the Immigration Office of Panama a Provisional Processing Card along with the Visa of entry and exit that you will be able to use for a lapse from 3 months to 1 year.
4. Finally, you will receive the Panama Pensioned Resident Card and the Permanent Visa.

Passport Registration

The passport requirements are explained below: 

-2 passport type photos of the applicant (also of dependents or spouse if applicable)

-Completed registration form for the Panama Immigration Registry.

– You must present the original passport and submit a copy of it. At the end of the procedure, the passport will be returned to you. You must take into account that the passport or passports to be presented must have at least 6 months of validity from the moment the procedure is initiated.

– Original certificate of good health of the applicant and dependents (if applicable). This must be issued by a Panamanian hospital or health center with its due license.

NOTE: In order to carry out these procedures at the Panama Immigration Office, you must make a short visit to Panama, where you will also be able to take the required health examinations. 

At the time of the visit to the government offices for the in-person procedure, you must refrain from wearing shorts, sandals or T-shirts.

Finally, it is important that all the required documents to process the Pensioner Visa are sent in advance by courier before your first visit so that we at Mundo Offshore, can help you make the application process faster and safer. Remember to download and complete the Department of Immigration forms. You can also send these documents via mail and we will speed up the process of following up.

So that our Mundo Offshore team can accompany you in this process, we will provide you with the following documents: 

– A special power of attorney, where Mundo Offshore is authorized to make applications and immigration documentation (of the applicant as well as the spouse or dependents).

– A letter in which the applicant becomes responsible for dependents (if applicable)

– Forms of the Department of Immigration of Panama, that will have to be completed to be delivered later to the above mentioned department.

It is important that, if the documents are in a language other than Spanish, they must be translated with a Panamanian certified official translator.

If you wish to establish a business in Panama or buy a business either in Panama city or the freezone, all you need is to establish a company and put 160,000 USD in its funding capital. If this is done and you employ 2 Panamanians you can then use the funds for whatever business expenses you choose and are automatically entitled to a permanent residency for you and your family.

The Panama Business Investor Visa requires a minimum investment of $160,000 in any legitimate new business, or a new setup corporation. Obtaining a commercial business license, registering with social security, and hiring 5 Panamanian employees paying their social security benefits and at least pay the minimum wage, are additional requirements.

Every Panama Business Investor Visa requires three 2-year temporary resident visas before becoming permanent residents.

Foreigners desiring to invest in a Panama business, with a minimum capital stock of One Hundred Sixty Thousand dollars ($160,000) per applicant will be able to request the Panama Business Investor Visa, as shareholders or officers of said business.

Foreigners who apply for the Panama Business Investor Visa must prove that the minimum investment (US $160,000 per applicant) is his/her own money. A foreigner can start up any type of legal business [Except for businesses reserved for Panamanian nationals, such as, lawyers, doctors and retail sales.]

If the Panama Business Investor has dependents, the Panama business investment must increase by Two Thousand dollars ($2,000) for each dependent.

The Panama business must employ five (5) full time Panamanians (for each applicant), paid a salary at of at least the minimum wage established in the law for each region and detailing the position or activity that each employee carries out. The Panama business must register its employees in the CSS (Social Security).

Documents

In addition to the requirements established in Article 28 of the Decree Law the following documents must be provided:

1. Certificate of original legal status from the Public Registry; the trade name of the Panama business; the status of the applicant as director or officer in the Panama business; the name of the legal or authorized representative (if applicable); the capital stock of the Panama business (must be minimum of $160,000); type of Panama business activities; and the distribution of the capital stock;

2. Certification by the Secretary or Treasurer of the Panama business attesting that the minimum value of $160,000 exists. The certification must be in writing signed before a notary;

3. Copy of the Business Plan for the company;

4. Certification by the Authorized Public Bookkeeper or Accountant (CPA) for the Panama business, that accredits ownership to the foreign applicant and that there is $160,000 available for the Panama business detailing the activities of the business;

5. Statement signed by the applicant before a Notary Public, indicating the total of the minimum required capital invested, the role of the applicant in the company, as well as, detailing the Panama business activities of the company;

6. Receipt of advanced payment of the capital gains tax in case the applicant has acquired an existing company of a third party and copy of the Panama business purchase contract;

7. Copies of the Tax Return of the Panama business, with its Paz y Salvo (only in case the business had been operating months before the date in which one must present the affidavit of incomes of the tax year in effect). The Tax Return should reflect the payment of the foreign applicant’s minimum $160,000 investment;

8. For a Panama business recently started, the Unique Registration of the Taxpayer (RUC) identity number;

9. Copies authenticated by the CSS of the type of Panama business, with a minimum of five (5) Panamanian employees (per applicant), verifying the minimum wage established by law according to the region and area. (They should correspond to one of the payments performed inside the three previous months of presentation);

10. Paz y Salvo of the CSS in favor of the Panama business;

11. Proof of the minimum required Panama investment. This will be able to be shown by the presentation of at least three of the following documents that are under the Panama business name:

1. Bank Certification of the transfer of funds by the applicant originating from outside of Panama (obligatory); b. In the event that they have acquired shares of a company already started, they should present proof of payment and the contract of sale; c. Copy of the proof of deposit of the investment for the Panama business, authenticated by the bank; d. Contract of buying or renting the localities where the Panama business operates; e. Audited Financial Statement; f. Receipts of the expenses incurred by the investor in the Panama business, accompanied by a detailed inventory prepared by a CPA. (Must also include a copy of a document that accredits the licensing of the CPA); g . Customs inventories of the goods imported in the Panama business name; h . Any another document that can show the capital invested in the Panama business.

12. Documentation that proves the existence and location of the Panama business, by submitting at least three of the following documents (can be any of the following documents or another that shows the existence of the Panama business)

1. Rental agreement of the commercial localities where the headquarters of the Panama business operates; b. Last service billing for electric power, telephones, or drinking water supply service; c. Contract for security services; d. Proof of payment of the ITBMS tax to the Department of Economy and Finances. e. Proof of payments to the Municipality.

13. Copies of the Notice of Operation.

To request continuance, besides the requirements mentioned above,, the applicants should submit the following documents:

1. National Paz y Salvo of the Panama business and of the applicant;

2. Copies of the tax return of the Panama business, with its respective receipts of payment. In the tax return (in the section patrimony, course of action) the payment of the totality of the actions of the foreign applicant (that should be greater than $160,000) should be registered;

3. Copies of the Form 03 presented to the Department of Economy and Finances;

4. Paz y Salvo from the CSS in favor of the Panama business in effect.

– Disadvantage of this visa: complex documentation, and long term processing to obtain permanent residency status.

Documents that are necessary to process legal residency and passport:

1. Power of Attorney allowing our law firm to act on behalf of the applicant (and dependents – if applicable).

2. Certificate of Good Health, signed by a registered, licensed physician, indicating that the applicant (and dependents – if applicable) has no contagious diseases and is in good mental and physical condition.

3. Notarized and authenticated police record from the place of residence for the applicant (and spouse & children – if applicable).

4. Certified or notarized Birth Certificate of the dependents ( if applicable).

5. Marriage Certificate for the applicant and spouse (if applicable).

6. Valid passport of the applicant (and dependents – if applicable).

7. Three (3) passport sized photographs of the applicant (and dependents – if applicable).

8. Financial reference letter from your bank, credit union, or brokerage / investment firm.

    All documents must be apostilled or authenticated by the Panama Consulate in your country.

Documents required for Temporary and Permanent Residence

The article 28 of the Decree-Law extensively presents the documents required for Temporary and Permanent Residence (quote from the Decree-Law):

1. Certificate of original legal status of the Public Registry which shows company’s commercial name in Panama, the applicant’s status as director of the Panamanian company, the legal or authorized representative’s name (if applicable), corporate capital of the Panamanian company, the type of Panamanian commercial activities and the distribution of the corporate capital. 2. Certification of the Secretary or Treasurer of the Panamanian company accrediting the existence of the minimum amount requested (written certification signed before a notary). 3. Copy of the company’s Business Plan 4. Certification for the Panamanian company issued by the Certified Public Accountant (CPA) that accredits the property to the foreign applicant. 5. Declaration signed by the applicant at a Public Notary, indicating the total minimum required capital invested, the applicant’s role in the company and detailing the company’s commercial activities in Panama. 6. Pre-payment receipt of capital gains tax in case the applicant has acquired an existing company from a third party and copy of the business purchase agreement in Panama. 7. Copies of the Panama company’s Tax Return, with its Paz y Salvo (only if the company has been operating months before the date on which the income tax return for the current fiscal year must be filed). Note: The tax return must show the minimum investment payment of $160,000 by the foreign applicant. 8. Single Taxpayer Registration Number (RUC). Requested for a recently created Panamanian company. 9. Authenticated CSS copies of the Panamanian business type, with a minimum of five (5) Panamanian employees (per applicant), evidencing the minimum wage established by law by region and area. 10. Paz y Salvo of CSS in favor of Panamanian business 11. Proof of the minimum investment required in Panama, demonstrable through any of the following documents: a. Bank certification of the transfer of funds by the original applicant from outside Panama (required) b. If a person has acquired shares in a company that has already been incorporated, he or she must present the payment voucher and the purchase contract. c. Copy of the deposit receipt of the investment for the business in Panama, authenticated by the bank. d. Purchase or rental contract of the localities where the Panamanian business operates. e. Audited financial statement f. Receipts for expenses incurred by the investor in the Panamanian business, accompanied by a detailed inventory prepared by a CPA. (include a copy of a document accrediting the license of the CPA) g . Customs inventories of imported goods in the name of the Panama company. h . Any other document that can show the invested capital in the Panama business. 12. Documents that demonstrate the existence and location of the Panamanian business, by means of the submission of at least three of the following documents (it can be any of the following documents or another one that demonstrates the existence of the Panamanian business): a. Rental contract of the commercial locations where the Panamanian company’s headquarters operates b. Latest utility bill for electric service, telephones, or drinking water c. Security services contract d. Proof of payment of ITBMS tax to the Ministry of Economy and Finance e. Payment voucher to the Municipality 13. Operation Notification Copies

To request continuance, in addition to the requirements outlined above, they must list the following: 1. National Paz y Salvo of the Panamanian company and the applicants 2. Copies of the Panamanian company’s tax return, with their respective payment receipts. Always remember to show on the return the minimum amount to invest. 3. Copies of Form 03 submitted to the Ministry of Economy and Finance 4. CCS Paz y Salvo in favour of Panamanian business.

It should be noted that while the Panamanian visa for residence has great advantages over investment, it also presents disadvantages in terms of complexity and time extension. On the other hand, for the processes already exposed, the applicant must attend in person to the Panama migration office. Likewise, the office, like any diplomatic or governmental entity, will not admit people who come with inappropriate clothing for the occasion (shorts, sandals, t-shirts, etc.). Finally, once the visa is approved, it is recommended that you stay in the country for at least a couple of weeks, as the immigration office may hold your passport for a few days while they insert the official stamps and information.

Procedure

Procedures to Obtain Panama Resident Permits (Visas) is as follows:

1. Register passport at Immigration.

2. Present application with all required documents to immigration, with Government fees & Repatriation Deposit (if applicable).

3. Immigration department issues applicant a Temporary Permit (Visa) & Multiple Entry-Exit Visa.

4. Immigration department issues applicant 2 year Temporary Permit (Visa).

5. Immigration department issues applicant Permanent Residency Permit (Visa).

6. After 5 years of Permanent Resident status, applicant may apply for citizenship through Naturalization process (once a citizen, then passport may be obtained).

Note that immigration requests that the applicant for any type of Panama visa be present physically at the immigration office in Panama, at the time of visa application.

Panama Immigration will not allow people to visit wearing shorts, t-shirts, or sandals.

When the immigration visa is approved plan to visit Panama for two weeks because immigration may hold onto your passport for 5 business days while they insert the official stamps and information in the passport. CONTACT US

If you believe in green investment and eco friendly investment, then you can invest 80,000 USD in a an approved teak plantation. This allows you to collect the profit after the teak has grown, plus enjoy the benefits of a Panamanian permanent residency. 

“The Panama Reforestation Investment Visa is a permanent Panamanian residential visa which enables the investor to purchase a minimum of five hectares of titled land, as part of a reforestation 

project or forest plantation certified by the Panamanian government. The visa, which requires a minimum investment of  eighty thousand dollars (US$80,000) offers the investor, together with his family, permanent residency and eventual Panamanian citizenship. In the case of dependants, there will be an additional charge of $2,000 per dependant.

The law states that foreigners who invest, either in their own names or through a legitimate business, in reforestation, authorised forest plantation or similar activity approved by the National Environmental Authority (ANAM), will be entitled to apply for the visa.  The sum of eighty thousand dollars ($80,000) will enable the investor to purchase a minimum of five hectares of land.”

The advantages of investing in reforestation

• This is a safe, high-return, long-term investment, very suitable for long-term retirement planning or funding your family’s future educational needs
• It is a tragedy that man has destroyed the tropical rainforests which are nearing extinction. You have the perfect opportunity to benefit the planet by reducing deforestation. The protection of the tropical rainforests is essential for maintaining a natural habitat for plants and animals, halting climate change, reducing the amount of carbon dioxide in the atmosphere and replenishing global water resources.
• With the world population increasing more and more every day, the demand for lumber has grown too.  For this reason, and in order to help reduce the impact on the environment, it is much better to collect lumber from sustainable reforested plantations, rather than from rainforests.
• Historically, the price of hardwood has increased and the trend continues

In return for your investment in reforestation, the Panamanian Government will grant you legal residency and eventually a passport.

Basic requirements for processing a Panama reforestation investment visa:

• All visa applications must be processed by a Panamanian lawyer.
• All overseas documents must be certified by a Panamanian Consulate or by Apostil (an internationally recognized form of authentication of documents))carried out by the ministry of foreign affairs or by the secretary of state.
• All applicants must provide a Police Clearance report (criminal history record).  For US citizens, an FBI criminal history clearance report is also required.

• All documents must be issued no earlier than 4 months prior to the submission of the application.
• Passports must have at least 6 months remaining before expiration at the time of submission.
• Dependants (spouse and children under 18 or no older than 25 if they are still in education) can be included in the residency at an additional cost of two thousand dollars ($2,000) per  dependant. The investors must provide a legal marriage certificate and the birth and certificates of any children for any children.
• Applicant and dependants must present themselves in person to the Immigration Office for the initial application and subsequent renewals.
• Expect to be in Panama for two weeks.  After registering and submitting all documents, immigration will issue you with a provisional resident visa.

Note:  Panama Immigration does not allow visitors to the Immigration Office to wear shorts, t-shirts or sandals. Long trousers, a shirt with a collars and shoes must be worn.

After the immigration visa has been has been approved, please plan to stay  in Panama for two weeks to process your resident card as immigration may hold on to your passport for up to 5 days while add the official resident visa stamps and information are added to the passport.

Additional requirements for a Panama reforestation investment visa

The applicant must submit the following documents in addition to the basic requirements established in Article 28 of the Decree Law (Mundo Offshore will provide these documents if the reforestation investment was transacted through our firm):

1. Where a legal entity such as a corporation is the owner of the reforestation property, the applicant should present affidavits drawn up by the secretary or treasurer of the business (not the applicant), verifying the ownership of the nominative shares given to the foreign applicant, fully completed and with the total capital stock;

2. Certification of a Panamanian Authorized Public Accountant (CPA) which details the grand total invested directly in the activity of reforestation and that the amount was paid by the applicant.  (The CPA should include a copy of the decree and of the card in force);
3. Authenticated certificate of shares in favour of the Panama Reforestation Investor (the applicant);
4. Copies of the official tax return of the business where the capital is invested. If a fiscal period has not yet elapsed since the creation of the business, then the copy of the certification of inscription of the Corporate Tax ID (RUC) should be presented;
5. Copies of the resolution by the National Environmental Authority (ANAM) with regard to the Forestry Registration Certification;
6. Original Public Registry certification of the inscriptions of the business and the property title;
7. Proof that the investment is directly involved in reforestation, with a minimum of eighty thousand dollars ($80,000) which can be proven with documents including:
8. Banking Certification of the funds transfer or of the payment (obligatory);
9. Audited Financial Statement;
10. Commercial bills of buying and selling;
11. Documents of merchandise importing;

The applicant must submit the following documents as well as those mentioned above,  to request an extension:

1. Certificate of Incumbency (Paz y Salvo) of the applicant;
2. Bills or other documents that show disbursements performed in the last year for the reforestation project, or certification of the company that is carrying out the maintenance plan, showing that the contract remains in force.

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Procedure for obtaining a Panama Reforestation Investment Visa:

    To make an investment of at least  $80,000 to purchase a minimum of five (5) hectares.

   After making the investment the applicant and his/her dependants must present themselves in person to the Immigration Office in order to submit the initial application and for subsequent renewals.

The procedure for all resident permits (visas) is:

    Register passport at Immigration.

After five years of Permanent Resident status, the applicant will be allowed to apply for citizenship through the Naturalization process, after obtaining citizenship, the applicant will be entitled to a Panamanian passport

– Present the application with all the required documents, government fees & repatriation deposit (if applicable) to Immigration.

-The applicant will get a Temporary Permit (Visa) & Multiple Entry-Exit Visa issued by the Immigration Department.

-The applicant will get a  two-year Temporary Permit (Visa) issued by the Immigration Department.

– The applicant will obtain a second Temporary Permit (Visa) & Multiple Entry-Exit Visa issued by the Immigration department.

  -The applicant will receive a Permanent Residency Permit (Visa) issued by the Immigration Department.

Immigration Processing Fees for a Panama Reforestation Investment Visa

For Primary Applicant:

Stage 1:

Legal Fee – two-year Panama Temporary Immigrant Visa: US $2,000

Government Fees and Costs: – To Tesoro Nacional (National Treasury): US $250

    Repatriation Deposit (refundable once permanent visa is approved): US $800

    Other Fees: US $350

Total Government Fees & Repatriation Deposit: US $1,400

Stage 2:

Legal Fee – Panama Permanent Residency Visa: US $1,500

Government Fees and Costs: US $500

Stage 3 (optional):

Legal Fee – Panama Naturalization (Citizen / Passport): US $5,000

Government Fees and Costs: US $2,000

For Dependants (spouse or children under the age of 18):

Stage 1:

Legal Fee – two-year Panama Temporary Immigrant Visa: US $1,500

Government Fees and Costs: – To Tesoro Nacional (National Treasury): US $250

    Repatriation Deposit (refundable once permanent visa is approved): US $800

    Other Fees: US $350

Total Government Fees & Repatriation Deposit: US $1,400

Stage 2:

Legal Fee – Panama Permanent Residency Visa: US $1,500

Government Fees and Costs: US $500

Stage 3 (optional):

Legal Fee – Panama Naturalization (Citizen / Passport): US $5,000

Government Fees and Costs: US $2,000

IMPORTANT NOTE:  The corporation that holds the reforested property title must file an annual tax declaration in Panama, which is required for the renewal of the resident visa.  The accountant who files the annual tax declaration for the corporation charges US$200.

In order to renew the resident visa, the corporation which owns the reforested property must file an annual tax declaration in Panama. Usually, an accountant will charge 2000 USD to file this tax declaration. 

Multiple Entry & Exit Visa (Optional): If an applicant would like to leave Panama and return before receiving their temporary visa is approved, he or she should obtain a Multiple Entry & Exit Visa.

This visa should be applied for at the same time or after any other type of visa is applied for, and it  allows the applicant to enter and exit the country an indefinite number of times.

If you are a professional with the appropriate degrees that are considered to benefit Panama, then you will be entitled to apply for a professional visa which grants a permanent residence. Your degree has to be acknowledged and certified by a Panamanian University and it has to come under the current list of occupations. These include: managers, computer and IT staff, food technologists and many others. The process is time consuming, however, no money is required, so in effect you can get a permanent residency without investment.

It is important to remember all the above are permanent residencies that permit the holder to have the legal right to obtain Panamanian Citizenship for them and their family after only five years. At present, there is no minimal stay requirements.

Nowadays, under the influence of Common Reporting Standards (CRS) and FATCA, having a genuine and legally validated tax residency is essential for businessmen, entrepreneurs and indeed all international contractors that derive their income from international sources. Panama is one of the best individual tax residencies available today for the following reasons:

    Panama does not tax worldwide income (it only taxes Panamanian sourced income). This means you can legally have an income of 5000 USD a month from Panama sources (e.g., salary, dividends, rental income, etc.) for which you will pay tax, whilst having millions of dollars in income from overseas, for which you will pay zero tax. This is why many of the world´s wealthiest individuals choose Panama as a tax residency destination.

    Panama is not considered an offshore jurisdiction, this means that international banks in Switzerland, Europe, United States and other countries, accept UBO accounts of Panamanian tax residents with no problem whatsoever.

    Panama residency and tax residency is obtained quickly and with minimal red tape. In fact, if you are from any of the 47 countries that qualify for friendly nation status, you can obtain Panamanian residency and tax residency with no investment at all.

    For more information on Friendly Nations Visa click here

    As a Panamanian tax resident all your worldwide income will be reported only to Panama. Panama has strict banking and privacy laws which are considered some of the strongest in the world. Moreover, this country has a very solid legal protection for depositors, meaning that you can safely keep your money in the Panamanian banking system.

    As a Panamanian tax resident you will never have to pay income tax in any other country again. You can show your documentation from Panama to demonstrate your tax residency and be fully exempt under almost all domestic and international laws on personal income tax in any country. The only exception is the United States. However, even in that case, the first 160,000 USD of your income are not taxed by the US, and if you run a Panamanian company you can keep the profits inside the company and not pay tax until you pay yourself. This is called tax deferral and is perfectly legal. This tax deferral is implemented by many of Americ ´s largest corporations.

    As a Panamanian tax resident you can legally transfer your worldwide income to a Panamanian foundation. This way, your income will be protected from all creditors, including foreign governments, under one of the best asset protection regimes around the globe.

In order to become a tax resident in Panama you have to meet some requirements. The following rules apply:

Article 762-N: In order to be considered a fiscal resident of the Republic of Panama, an individual should remain inside the country for more than 183 calendar days or alternates in a fiscal year or the year immediately preceding. 

The individual who has established permanent residency in Panama is also considered to be a tax resident of this country, 

The legal entities incorporated under the laws of Panama, which have material means of Direction and administration in the Panamanian territory, are also considered fiscal residents

Likewise, the juridical persons registered abroad which have material  means of management and administration within Panamanian territory, and which are registered in the Public registry are considered to be fiscal residents in Panama

There is a list of requirements set forth on Resolution Number 201-0354 of 13 of January of 2016, in regards to the attainment of the Tax Residence Certificate. The objective is to prove that the individual has economic or family ties to Panama, which means utility bills, groceries receipts, rental agreements among other documents, may help you get the tax residency certificate. With this certificate you will then be able to prove your fiscal residency and avoid sharing financial information with your original country of residency. Thanks to the Territorial Principle of Taxation you won´t have to pay taxes for you income outside of Panama, even if the bank reports back to Panamanian authorities. 

It is important to have in mind that faking relocation is not a good idea. It will be imperative to prove you actually live in the country.

Private Banking is the term used for high net worth clients who open up a special account with their bank that gives them the elite of banking services with a highly competent bank manager to take care of their needs. This can include brokerage accounts and other investment products, such as precious metals storage, special concierge services, multi-currency and forex accounts and many other financial services. Usually, private bank account holders get access to deals and services that ordinary customers do not. Whilst most Swiss banks only agree to open accounts of this nature for clients with wealth in access of 1 million, certain private banks in Panama will agree to do this for much less, provided that they are sure that the client will develop a relationship with them over time.

Panama is becoming the Switzerland of Latin America and therefore private banking is certainly a service worth considering. Another advantage is that many banks will be happy to open accounts for trusts and foundations which will mean you can have an intergenerational asset protection and succession plan with a reliable bank in Panama.

It is easier and indeed better to open up private bank accounts if you are a Panamanian resident, however this is not a requirement for most banks.

Because Panama has no currency restrictions and no tax on worldwide income, Panama is an ideal corporate banning centre for goods and services.  Panamanian banks will accept foreign and domestic companies as clients but these days, they are tending to prefer domestic companies with substance.

Panamanian banks offer multi-currency accounts in Euros, British pounds, US dollars and recently even in Yuans.

-General bank license. This license allows the bank to operate inside and outside of Panama and gives the right to conduct any type of banking activity authorized by the corresponding Panamanian regulatory organs. 

-International banking license. It authorizes the bank to operate abroad but from an office that is physically located in Panama. It has also the right to carry out activities authorized by the SBP. 

-Representation bank license. This allows foreign banks to open representative offices in the Republic of Panama. It can also carry out any activity authorized by the SBP (Superintendence of Banks of Panama).  These banks must use the expression «representative office» in all their banking operations.

In order to apply for a banking license, it is necessary to submit an application according to the laws and regulations of Panama. It is important to do this through an experienced lawyer or important firm authorized to provide financial services in the country.

Requirements for obtaining a banking license in Panama

In most countries it is required to submit the following information in order to obtain a banking license: 

– Bank´s name and legal form of the institution

– Applicant’s status, this may vary depending on the institution´s details (establishment of an office branch, a foreign bank or a new company)

– Names and CVs of the bank´s directors

– Police record proving the absence of criminal history of applicants and directors

– Banking and commercial references

– Submission of information related to the economic administration of applicants’ signatures

– Proper identification of the bank’s shareholders

– Information on the type of shares issued by the bank (registered shares, preferred shares, non-voting shares, etc.)

– Bank’s capital structure and capital security

– Bank’s capital reserve

– Information indicating what resources the bank will invest

– Document certifying that the registered capital has been paid (if registered in the host country)

– Name of the bank’s issued shares and the type of currency used

– Document certifying that all taxes, stamps and royalties have been paid

– Identification of the registered office in the host country

– Identification of the data of the registered agent or representative (if required)

– Identification of the data of the auditor and lawyer with a registered office in the host country

– Type of services the bank will offer

– Territory range where the bank will operate

– Way of protecting the company from fraudulent or criminal attacks

– Bank´s business plan 

– Benefits to the host country as a result of the bank’s operations

– Signed and submitted applications for obtaining  the license

A non-banking financial institution is a financial institution that doesn´t have a full banking license or is not supervised by a national or international banking regulatory entity.

Some example of these might be currency exchangers; currency brokerage; compensation currency houses; credit cooperatives; money transmitters; sellers of gold, silver and precious metals; moneylenders; etc.

The offshore financial companies are entities that are usually registered in jurisdictions where there is a valid license for these activities. These financial entities are usually located in low tax jurisdictions. 

A Panama Financial Services Company is a special type of Panamanian IBC that has been granted a special licence by the Panamanian Ministry of Commerce. This license allows the company to conduct certain financial operations which do not require a more strictly regulated permit.

More specifically, this license provides evidence that this company is allowed to carry out the activities and offer the services specified in the document. 

A Financial Services Company of Panama is a licensed yet not regulated entity through which it is possible to hold and manage funds. This type of license is issued by the Panamanian Ministry of Commerce. It is much easier to fulfil the compliance requirement of this license than the requirements of a banking license (issued by the Superintendence of Banks of Panama).

Benefits of a Panama Financial Services license: 

-These licensed corporations are usually used to handle third-party funds. For example investment services for an offshore bank in a different jurisdiction or for providing electronic services.

-The Panama Financial Services License has low cost and it´s the most efficient unregulated structure. If you are planning on managing clients´ money, then this license is a good choice. 

-The companies working under this license can work effectively with other structures. For example, you will be able to outsource some of your services for tax optimisation or set up a trading centre in another jurisdiction which has a better reputation than the country where you got the license. 

This type of licence allows the following transactions in addition to the usual transactions of the company:

-Open corporate bank accounts and accept client funds, usually on behalf of an entity operating in another jurisdiction.

-Operate as a correspondent account in order to manage and transfer funds on behalf of clients in a separate jurisdiction.

-Act as a payment Intermediary.

-Currency / FX and Bitcoin accounts.

-Conduct precious metal trading 

-Factoring

-Leasing

Capital and Office Requirements

Usually a Panama Financial Services Company doesn´t have a minimum amount of paid capital required. The only exception is when it comes to leasing services. This not only requires a special permission but also a capital of $100,000.

Although minimum paid capital is not required, it is advisable to contribute with a capital between $100,000 and $250,000 as this shows your commitment to the Panama Financial Services Company. 

We also recommend opening an office in Panama and turning your offshore corporation into a domestic company. This will improve your chances of success.

Having a local presence will allow you to access a wider range of Panamanian banks. Many banks are only willing to do business with local entities. For this reason having an office and one or more employees can be very useful and will definitely help you deal with issues that may arise. 

Limitations of a Panama Financial Services Company

Companies working under the Panama Financial Services licence are not allowed to engage in the following activities:

• Securities trading or broker-dealer activities including investment funds, managed trading etc.
• Credit Union (cooperativas)
• Savings and Loan (financiera)
• Fiduciary (trust company) services
• Cash transmittal services or currency exchange (e.g. bureau de change)

Each of these services is regulated in a different way by the Panamanian government; each of them has its own requirements and minimum capital conditions. 

It is forbidden for the Panama Financial Services Company to offer banking services. It may offer services to a bank in other jurisdiction but not offer services directly to the clients of the bank. 

Conclusion

Setting up a Panama Financial Services Company is relatively inexpensive and highly recommended. The register process can be completed in only 15 days.

An investment license is necessary for those who intend to conduct financial activities in and beyond Panama. 

By having this type of license, businessmen and businesswomen are allowed to provide the following services:

• Managing own funds and contributions of the clients.

• Control of shares and finances intended for all types of property.

• Intermediation in conducting transactions between two legal entities or natural persons.

• Mediation in creating and issuing of invoices.

• Granting and maintaining all types of credits.

• Leasing and brokerage services.

For this reason, an investment license is mandatory for the following businesses:  microfinance organizations, banks, insurance and brokerage offices, consultants regarding crediting, miscellaneous institutions and pawnbroker’s offices.

Each of these businesses can get an investment license type “A”.

Terms and conditions

Before applying for a financial licence in Panama it is compulsory to register a corporation in the country. It is not enough to just open a branch of the main company because the local office should be a multi-structural one. All the main processes and activities of the whole group will be conducted from this office. 

The original documents, including the charter and extracts, should be stored in the building. It is also required that the company is properly registered in the State register for tax payers. 

The Ministry of Trade and Industry of the Republic of Panama will issue the certificate that allows conducting of financial activities. 

Required documents: 

• Detailed business plan of the corporation and estimated costs of the structure’s development. 
• Copies of the documents of incorporation, copies of the charter and the protocol.
• Confirmation of registration in Panama  where the legal address is properly stated, and contact details of the head office. 
• Copies of documents of directors and beneficial owners. Certified translation of these documents to Spanish. The translations must be certified by a duly qualified notary. 
• Extract from the bank confirming the applicant´s financial status.

All the companies that have acquired this investment license are exempt for taxation. However, they still have the obligation to report to the tax authorities for a determined period of time, usually three months.

The cost of investment license in Panama

The price for obtaining a license for financial activities in Panama is relatively low. The price consists of the following:

-Registration of the company in Panama and contribution of the authorized capital. The authorized capital depends on the activity of the firm and on its working instruments. 

-Account opening with a local bank. The price will depend on the bank. 

– State and commission fees for filing and processing of the application.

-Payment of the license. If the licence is approved then the applicant should pay a 2% of the authorized capital. This transfer will be carried out annually at the beginning of the accounting period of the year. 

It is possible to ask for more detailed information on each of the items through our contact page.  

Panama is a well-known financial centre which offers a wide variety of opportunities for doing business in different industries. This also includes the gambling sector.

A gambling business in Panama offers some interesting benefits such as tax exemption, eligibility to all communication systems and a simplified reporting system.

In order to start an online casino business it is necessary to make a deposit of $40, 000; and the yearly renewal costs $20,000. It is, of course, necessary to register the business according to the Panamanian legislation.

Requirements for starting an online gambling business:

• To issue a power of attorney to a Panamanian lawyer so that he or she can submit the application and act as a legal and local representative.
• To open a business subject to licensing.
• Creation of a business plan and confirmation of the minimal level required to perform online gambling operations.
• To pay all corresponding duties and fees according to the Panamanian regulations, including a 10% of the monthly profits. This will depend on which of the two amounts is larger.
• To prove financial stability and to validate the source of the available capital.
• To have the necessary software in order to be able to find out the gambler´s location and his/her financial resources. 

Licensing procedure

If you want to obtain a licence for an online casino in Panama, it should be registered as per the enterprise. Mundo Offshore´s experts can help you and support you throughout the whole process. We offer a full package service and will help you get your license in a faster, easier and safer way. 

In order to achieve successful results, the company´s founder is required to:

• Give full access to his/her personal information to the local authorities.
• Obtain a reference letter from a banking institution
• Submit the application in order to register the company in the State Register. 

The application should be submitted along with information about the company´s location, activities and names of individuals who will be involved in the operations including legal representatives, operators, owner and other members of the staff. The application should also include information about the company´s structure and tax reports. It is not necessary to share information about the founders’ or shareholders´ place of residency, meaning that the personal data of beneficiaries will remain confidential. 

A Panama Offshore Company or International Business Corporation (IBC), as it is commonly referred to in other jurisdictions, is one of the longest standing offshore formation jurisdictions in the world. Established in 1927, it has since registered 400,000 corporations and remains one of the premier destinations for offshore business formation. The Panamanian offshore model has since become the world standard due to its flexible formation structure, its methods to ensure customer privacy and its supportive legal framework.

Panama is strategically located as a bridge between the Americas and has become an international center for trade, finance, and banking services. Thanks to a stable political environment, the Panamanian economy has achieved rapid growth over the last two decades due to its open business environment, free trade zones, and low tariffs that have encouraged investors and business enterprises from different countries. Panama remains one of the best places to conduct business due to its financial opportunities, low risk investments, and thriving banking center.

A Panama Offshore Company gives individuals and corporations the ability to settle in a country that has a long term reputation for financial and offshore excellence. Offshore formation in Panama offers complete confidentiality, attractive tax-free opportunities, a favorable legal environment, and a supportive banking infrastructure, all of which account for why Panama is one of the premier destinations for international corporations.

Panama Corporation	Corporate Details
General
Type of Entity	Limited by Shares
Type of Law	Civil Law System
Governed by	General Corporation Law of 1927 Coded Bank Accounts Law 8 of 1959 Commercial Code Law 17
Registered Office in Panama	Yes
Shelf company availability	Yes
Our time to establish a new company	3 Days
Minimum government fees (excluding taxation)	250 USD
Corporate Taxation	No

Access to Double Taxation Treaties	Yes
Share capital or equivalent
Standard currency	Legal tender is the US dollar. Panamanian Balboa (official currency) PAB fixed exchange rate of USD $1.00 = PAB 1.00
Permitted currencies	Any
Minimum paid up	No minimum
Usual authorized	USD $10,000 divided into 100 shares of $100 each
Bearer shares allowed	Yes
No par value shares allowed	Yes
Directors
Minimum number	3 Directors/Officers (President, Secretary and Treasurer)

Local required	No
Publicly accessible records	No
Location of meetings	Anywhere
Corporate directorship allowed	No
Shareholders
Minimum number	1
Publicly accessible records	No
Corporate shareholder allowed	Yes
Location of meetings	Anywhere
Company Secretary

Required	Yes
Local o calificado	No
Accounts
Requirements to prepare	No
Requisitos de auditoría	No
Audit requirements	No
Requirements to file accounts	No
Publicly accessible accounts	No
Recurring Government Costs
Minimum Annual Tax / License Fee	250 USD
Annual Return Filing Fee	350 USD

Other
Requirement to file annual return	No
Migration of domicile permitted	Yes

In order to register a foreign company an individual should present the following documents:

-Translation to Spanish of the articles of association. The translation should be notarised. 

-A board minute which authorises the registration in the territory of Panama.

-Copies of the financial statements.

-A certificate which guarantees that the company is registered in its original country according to the local laws of incorporation. This certificate should be issued by a Panamanian consul. 

-Notification of the allocation of capital to the Panamanian operation.

The capital taxes on formation and annual registration of a foreign company in Panama are the same than with Panamanian corporations. 

A foreign company can move the operation place to Panama, thus being subject to Panamanian laws regarding public policy, but remaining under the original legislation in other aspects.

If a foreign company operates in Panama without being properly registered in the country, it can be liable to sues. 

The Commercial Code, together with Law No 24 of 1966, also rule a limited partnership, usually referred to in Spanish as Sociedad de Responsabilidad Limitada. The minimum necessary capital to start such partnerships is USD 2,000 but it can reach up to USD 500,000. All of the details of the amount of capital invested by the partners must be recorded in the Public Registry Office, together with the names of the partners and their domicile. There is always an independent administrator, appointed by the partners, whose name must also be registered. There is no restriction as to where the partners come from. Partners from different nationalities can take part in Limited Partnerships. Each partner’s liability for the debts is limited to the amount subscribed. 

Limited partnerships must hold meetings at least once a year, as long as it is composed of over five (5) members. Partnerships with fewer members are not bound to hold meetings. It is not necessary to issue a filing of accounts or annual returns.

The setup of Individual Limited Propiertorships is carried out in the same way as Limited Partnerships, except for the fact that there is only one member. All the information about the member must also be registered in the Public Registry Office. This unique member of the Individual Limited Propietorship transfers assets for the sole purpose of trading and his/her liability is obviously limited to the amount represented by the assets transferred to the business. 

Private foundations in Panama are ruled by The Private Foundation Law, passed in 1995. The Foundation is set up as an autonomous legal entity, commonly destined to the protection of assets. No business activities are allowed, hence there are no members neither shareholders.

A Private Foundation is established with a notarised private foundation charter, specifying the names of the members integrating the Foundation Council, the Foundation’s property, domicile, the data of the Panamanian agent, among other details. Such charter must be submitted at the Public Registry; or before a Notary Public. 

The Foundation Council is the body administrating the foundation of behalf of the beneficiaries, whose names do not necessary need to be provided at the charter, but can be detailed in separate regulations together with the principles of operation.

Private Foundations require a minimum capital of USD 10,000, without accounts or audits. Foundations must pay the same capital taxes and annual registration fees as the Corporations. The minimum of capital taxes rises up to USD 60 while registration fees amount to USD 350. Tax is always levied on income generated within the territory of Panama.

It is important to note that Panama has dropped some civil law provisions, and therefore excludes the “forced heritage” regulations against foundation assets. 

Law No1, passed in 1984 has updated the Panamanian trust law which rules trusts. The transactions of entities acting as trustees are regulated by the National Banking Commission, which can only investigate the terms of particular trusts whenever beneficiaries raise complaints. Otherwise they have no authority to do so. In addition, we must mention that by the end of the year 2000, Panama enacted two laws in order to address money laundering and therefore Executive Decrees have been issued accordingly and all financial institutions are now under the eye of the bank superintendence. Before these measures, banks only were entitled to report financial transactions over USD 10,000 or any other activity considered as suspicious. 

All in all, there are general features of Panamanian trusts such as the following: they must be expressed in writing, so they are not constructive; trusts are irrevocable, unless stated differently; settlors, trustees and beneficiaries don’t need to be residents or Panamanian nationals; a trust needs an agent who should be a Panamanian lawyer. An existing or future property determines the settlement of a trust, while additional property may be included after. It is important to point out that there is no minimum capital requirements or fees. There are no specific provisions to protect trusts against foreign inheritance laws, judgements or creditors. As far as taxes are concerned, a tax is levied directly on the trust and not on the trustee. Trusts can be expressed either in the English or Spanish language.

Panama offers one of the world´s best tax optimization regimes for trading and startup companies who register in the free zone. Registering your company in the Panama free zone provides many benefits including:

The free zone certificate, along with an office and staff, provides substance. Your company will be treated as a head office or management center (an operating company), which means it will be considered by banks and other financial institutions as having to report to Panama only under the CRS (Common Reporting Standards). The free zone allows zero tax on worldwide profits as well as duty free and Vat free imports and exports of goods and services, making it an ideal base for international trade. The free zone company with full operations allows you to establish excellent relations with banks registered in Panama, giving you access to major banking infrastructure and facilities. Employee hiring regime is streamlined and easier than for other corporations under Panamanian Law. Panama does not forbid nor regulate crypto trading companies, which makes this country the ideal place to base your crypto or ICO startup. In fact, The Panamanian Government is planning to enact crypto-friendly licensing legislation, giving even more legitimacy to this sector.

Enacting legislation that enables the establishment of companies that are provided with a range of fiscal, migratory and labour advantages, designed to encourage the growth of specific economic activities, has become an effective strategy to boost investments in Panama.

This legislation is aimed at rising investment, creating jobs, transferring technology and knowledge and consuming goods and services, which are significant for the development of the Panamanian economy.

Created in 1995, the City of Knowledge is a global community of academic organizations, technology companies and non-governmental organizations, run by the City of Knowledge foundation.

Not only does this complex support non-profit organizations as a knowledge platform aimed at increasing the transformative and competitive capacities of the users in the aggregate, but it also offers a series of advantages and services directed to its users´ needs.

Legal Framework

Decree-Law No. 6 of 1998, whereby approval for the agreement between the State and the City of Knowledge Foundation on the establishment and growth of the City of Knowledge, was granted.

Colon Free Zone (CFZ), created in June 1948 as the premier free commercial zone in the western hemisphere, has operated as the most significant Latin American commercial centre for a period of 69 years. CFZ started running in a separate area of 35 hectares originally in Colon Downtown with 10 companies. At present, this free commercial zone consists of nine different sectors, which involve 1064 hectares for exhibition with no less than 2,000 companies.

Colon Free Zone is mainly aimed at encouraging tax free global commerce.  Logistics and banking activities support CFZ wholesale oriented commercial activities. These activities represent most of its trading operations.

Location

Because of its location within the heart of the Americas at the Atlantic entrance of the Panama Canal, specifically at Colon City, Colon Free Zone has become a natural distribution centre (DC) assisting to the regional market of Central America, South America and the Caribbean.  Colon Free Zone is surrounded by four containerized seaports, two cruise terminals, an international airport and a railroad terminal.

Connectivity

Because of its location within the heart of the Americas at the Atlantic entrance of the Panama Canal, specifically at Colon City, Colon Free Zone has become a natural distribution center (DC) assisting to the regional market of Central America, South America and the Caribbean.  Colon Free Zone is surrounded by four containerized seaports, two cruise terminals, an international airport and a railroad terminal.

Commercial activities

Within the Colon Free Zone the main activities of the companies, based on the purchase and sale of merchandise at the international level, consist of the wholesale of food, beverage, cigarettes, agricultural materials, textiles, clothing and shoes, household domestics goods, construction materials, hardware and plumbing equipment, machinery and other equipment, motor vehicle, and motorcycles, their spare parts and accessories. All this forms a centre of distribution from Asia to South America, the Caribbean and Central America. 

Received in large quantities tax free, merchandise is repacked, labelled, assembled, manufactured and reshipped in smaller quantities to customers in a wide area. 

Shipping lines and airlines, freight forwarding and consolidators, logistics operating services, custom’s brokerage, trucking and ground transportation, a banking platform by local and international banks and all necessary government services for trading and clearance are part of the huge number of logistics and other related services that traders, investors and tourists have direct access to. 

Besides, pursuant to the new amendment to the law, traders, investors and tourists are provided with not only aviation and airport services, including cargo storage in general, but also services and activities with repair and maintenance. 

Advantages and Requirements for Settlement

Companies within the CFZ can enjoy monetary, fiscal and corporate benefits, which involves tax exemption on imports, re-exports and manufacturing of goods, on re-export incomes, on invoicing, on other national or provincial taxes, as well as using the US Dollar as legal currency and renting land, building or any required spaces at a low price. In addition to those advantages, companies are also offered automated commercial operations, migratory facilities for foreign executives, digitalized security system, an enormous financial network of national and international banks, office of Intellectual Property and Systems for prevention of money-laundering, sale through e-commerce, and institution certified under ISO 9001: 2008.

Besides, companies with Licenses for Multinational Companies Headquarters (MHQ) or those authorized to operate under the special regime of City of Knowledge or Call Centers for commercial use, as well as Higher Education Center and Scientific Research Centers are permitted to locate within the CFZ.

In order to operate within the Colon Free Zone, companies must subscribe with the Administration: a Lot Rental Contract, and/or a Locale Rental Contract, and/or an Operations Permit Contract; and/or they must use the services of the Public Warehouse established within the Colon Free Zone.

Panamanian Government has a wide range of projects. One of the most relevant ones is the Panama Pacific Area. This Special Economic Zone develops a global trade centre and captivates huge multinational companies, logistics services, commerce and industry, and intends to attract new direct foreign investment and to create jobs in Panama.

Different industries, such as logistics, sea and air transportation, high-technology, call centres, shared services, among others, are being actively developed due to the economic and legal advantages of this project. 

With the assistance of public-private partnership, the Panama Pacific Area develops the zone and promotes successful policy compliance with significant regulatory frameworks. These entities are London & Regional Panama and Panama Pacifico Agency and are responsible for developing, managing, planning, and fostering the zone, as well as regulating zone activities. 

Panama Pacific Agency is the government entity in charge of managing, encouraging, regulating, designing and executing policies, which are either directly or indirectly connected with the operation and development of this Special Economic Area. Besides, this agency also helps and communicates investors about the business opportunities and advantages that the Panama Pacifico provides.

London & Regional Panama is a company that has developed the Zone for 40 years (renewable for another 40 years), and is charge of proposing the Site Development Plans based on the Master Development Plan.

Location

For strategic reasons, Panama Pacifico has been situated at the Pacific Ocean entrance of the Panama Canal on the former Howard Air Force Base just across the Bridge of the Americas. In fact, Panama Pacifico is located in the worldwide commercial hub with direct access to the Pan-American Highway, connecting Panama with Central and North America, next to the port of Balboa at the Pacific Ocean, only fifteen minutes away from downtown Panama City, forty five minutes from Tocumen International Airport, and an hour away from the largest container port complex in the Caribbean Sea.

Infrastructure

Panama Pacifico consists of 1,400 hectares: 800 for mixed development and 600 for ecological areas. Panama Pacifico has adjustable areas for investments in sectors of shared services, logistics, high-tech manufacturing, residential areas and office buildings. This special economic zone has been divided into different areas: PanAmerica Corporate Center, aimed at high-tech manufacturing, as well as at warehousing and distribution centers; the International Business Park, Town Center, aimed at commercial offices; Panama Pacifico International Airport; and Town Center, Kobbe Hills, Woodlands, River Valley, Mosaic, Soleo, Nativa, Explora, Hillridge y Madeira, which are residential areas.

PanAmerica Corporate Center (PCC) is a warehousing area, and it encourages an 88-hectare industrial park; 44.4 hectares are designed to the building of warehouses and infrastructures. Twenty-seven buildings are included in the main plan for lease in a sharing space model aimed for logistics services, warehousing and distribution, light manufacturing, freight movement and assembly. The facilities area spreads from 800 to 50,000 m2 in adjustable and separable formats.

A loading dock per each 500 m2, a clear height between 7 to 12 meters and a 1,275 kg/m2 floor load are part of the building designs. These components are furnished with mezzanine, optic fiber, water treatment plants, fire alarm systems, extinguishers, water hoses, smoke detectors, security gate which provides service every day at any time with restricted access, ventilation systems and parking lots.

Moreover, a LEED certification has been awarded to International Business Park (the office area), which, having been inaugurated in 2017, brings the following advantages to the companies located here:

• Savings in energy and water bills, conscientious use of resources, healthy internal areas and transformation.
• Being installed in a LEED Gold building results in more than a 40% decrease in water and electricity consumption.
• Due to the high efficiency bathroom accessories and the use of water condensed air conditioning, drinking water consumption and drinking water consumption for watering gardens could achieve a reduction of approximately 45% and 75%, respectively.
• 5% of the energy needed is produced by the sunlight absorbed through the photovoltaic panels that the building has.
• Wakefield Beasley & Associates architectural firm created the architectural design bearing in mind that all the office areas had an exterior sight and are full of natural light.
• Green buildings are targeted to minimize environmental effects, make full use of resources (water and energy), and enhance the quality of residential areas.
• Buildings, to be considered «green buildings», must be awarded a LEED certification (Leadership in Energy and Environmental Design) by the United States. This country decides on building compliance with different regulations.
• In Panama, in addition to national organizations and laws, such as the Energy Secretariat and Law No. 69 on Energy Efficiency, which support this sort of enterprise, there is also the «Panama Green Building Council», which is part of the «World Green Building Council». The WGBC is an international union of national councils around the world; that is why, this institution has become the most important and far- reaching world-wide organization in the market for the establishment of green buildings.

Costs

Companies settled within this zone enjoy a wide range of advantages brought by Panama Pacifico. The leasing business model is the framework under which the warehouses, buildings and land operate.  On a contract basis, physical spaces are leased per square meter and a maintenance fee.

Advantages

The Special Economic Area Panama Pacifico was created under the Law No. 41 of July 20, 2004 by Panamanian government.

Companies within this Special Economic Zone have distinctive corporate advantages, such as Integrated Procedures System, Special Migration and Labor Regulations, Tax Incentives (Partial or total tax exemption), Investment Stability Law Single Record, Center for Higher Education and Facilities such as banks, pharmacies, restaurants, gyms, among others.

Labor Benefits consists of established rates for overtime (no more than 25%) and for work done on holidays ; days of weekly rest negotiable; possibility for companies to stay open on Sundays and public holidays and a permitted 15% foreign labor force.  

Regarding Immigration, all work visas are provided at APP facilities and special visas for investors, employees and their close relatives are issued. Besides, just once, foreigners employed as specialists are allowed to import tax free, all kinds of items for personal or domestic use, provided that the amount does not exceed $ 100,000.00. 

There are an operating Onsite Customs Office within the special area, which is available every day at any time upon request, and operates through a post inventory audit system.

The incentives are designed to seduce multinational headquarters (MHQ), back office operation , call centers , multimodal and logistics services , high-tech manufacturing and process manufacturing , aviation industry services , offshore services , film industry , data, radio, television, audio and video transmission , transfer of inventory between companies in-site , transfer of goods and services to ships, aircrafts and their passengers, and imports and re-exports.

General Information

The Panamanian government has worked assiduously to attract foreign investment, promote business and generate employment in order to become more competitive at a global level. For this reason in 2007 the Law No.41 was created (amended Law No. 45, Law No. 57 and Resolution 15) with the objective of attracting international and multinational companies. The companies known as MHQ are those which operate as a foreign company but are registered in Panama, or those which operate as a Panamanian company but are owned by a transnational entity. The main objective is to provide services to their main offices located in countries other than Panama.

Companies registered as MHQ are allowed to enjoy special tax benefits. They are exempt from paying income tax as long as they are domiciled outside of Panama and do not generate income within the Panamanian borders. They are also exempt from transfer tax on movable tangible property and the provision of services, as long as they remain under the same conditions mentioned above.

Benefits

Tax Incentives 

• The companies that obtain the SEM license will enjoy legal stability to the investments referred to Law 54 of July 22, 1998 and Executive Decree No. 9 of February 22, 1999.
• Income Tax: Reduced rate 5% of income tax.

• Tax applicable to branches, complementary and dividend tax: Companies that hold a Multinational Company Headquarter licence will be exempt from these taxes.

• Operation Licence tax: The companies registered as MCH are not obliged to have a Notice of Operation, therefore are not subject to operation licence tax.

• Capital gains tax: when transferring shares issued by the company, the gains or losses are subject to capital gains but only at a fixed rate of 2%. 

• Transfer pricing: Transfer tax (ITBMS) does not apply, as long as the transfers are lent to entities of the same business group abroad that does not generate taxable income in Panama.

• Tax printers: All the companies with a Multinational Headquarter Licence will not be subject to the usual equipment. 

Exemptions for foreign workers

• If the salary is from a foreign source, then it is exempted of income tax.
• Household goods and vehicle for personal use of permanent employees are exempted of income tax. Nevertheless they are still subject to sales tax.

These exemptions only apply to those employees under the permanent Employee Visa of an MHQ and it doesn´t apply to Panamanian employees or foreign employees living under other visas. All the employees will still be subject to the fiscal regulations of Panama. 

Labour incentives

• Companies that hold an MHQ licence can hire foreign executives if they consider it necessary for administrative purposes.
• There is no limit regarding the number of foreign executives who can be hired to cover administrative positions. 

Migratory Benefits

• Foreign executives with permanent job positions in the MHQ are entitled to a permanent visa lasting five years. Dependents of the executive can also apply. 
• Company personnel can also apply to permanent residency.
• Foreign technical personnel that has been hired for short periods are entitled to a three-month visa. 

Requirements

• The groups that own the MHQ has to have a capital of at least $200 million, or the company has to provide services to at least seven subsidiaries or associated companies. 
• The group that owns the MHQ has to have assets of at least $200 million, or have presence (including subsidiaries or associated companies) in more than 40 countries and they should all operate under the same commercial name or brand. 
• The company registered as MHQ must have a minimum of fulltime employees and annual expenses according to the nature of the business it conducts. 
• All the applications regarding MHQ are submitted and run through the MHQ Licence Commission. The requirements for the granting of this particular licence are specified in the following law and resolution: Legal resolution No. 19 of 2017 and Law 57 of 2018.

• If the services provided are related to financial assistance on banking, insurance and reinsurance or security business either in Panama or abroad, the company must notify in advance to the corresponding regulatory entity. The company should notify, for example, to the Superintendence of Banks or Superintendence of Insurance, depending on the case. 

Activities

The companies holding an MHQ licence can provide the following services to their own business group:

• Regional operations management
• Logistics and storage
• Technical assistance to companies of the business group or to final customers who have acquired a product or hired services from the company. 
• Design construction plans of the headquarter or any subsidiaries 
• Consulting, marketing and advertising services for the corporate group
• Research and development of products and services, support of operations. 
• Financial assistance of different kinds such as financial management, credit and risk analysis, custody, due diligence, documentation file and processing, treasury services. 
• Any other analogous service has long as they have been previously approved 
• Electronic processing
• Accounting

The Free Trade Zones, often referred to as FTZ, are a vital part of a system, focused on carrying out actions towards the country’s development, through the settlement and operation of diverse companies. These companies promote investment opportunities, including goods and services into the global economy and creating jobs, which will result in social, educational, cultural, economic, technological, and scientific growth.

Law 32 of 2011 rules the Free Trade Zones in Panama. Nowadays, there are 11 active free zones and 5 being developed, in the cities of Panama and Colon.  

These Free Trade Zones, which are mostly addressed to foreign trade activities, are extremely attractive for foreigners since they offer labor and migratory incentives and tax benefits.

What is a Free Zone?

The Free Zones are basically free trade areas, defined to foster and develop all the necessary systems, services, buildings and facilities, as well as the required management, for any kind of company to function properly. Free Zones are focused on providing the best possible conditions for companies devoted to high technology, scientific research, logistics, education, production of goods and services such as environmental, health or general services. 

Free Zones ensure high levels of competitiveness and efficiency of the companies involved in a global scale.

Types of free zones

Free zones are divided into three categories:

State: The State is the only investor. 

The State entity or any private operating company will conduct the settlement, and the processes of development and administration, in accordance with legal procedures and the management contract.

Private: Individuals or corporations (domestic or foreign) are the investors. The owners are responsible for the establishment, operation and management, accordingly following the rules of private property and free enterprise, as well as Panamanian laws. 

Mixed: The State and national or foreign investors share the ownership. The State or a private company can either carry out the development, operation and administration.

 

In Panama, there are 16 Free Zones, 11 being active at the moment with 128 registered companies, These Free Zones operate in Zona Franca Corozal – Marpesca, SA, Zona Franca de Albrook and Panexport. As we have mentioned before, most of them provide services in the cities of Panama and Colon.

#	Free Zone	Total Companies	Status
one	Zona Franca Marpesca / Corozal (Procesadora Marpesca. SA)	3. 4	Active
two	Albrook Free Zone (Zona Procesadora de Exportación Albrook, SA)	27	Active
3	Free Zone PANEXPORT (Inmobiliaria SUCASA SA)	19	Active
4	Zona Franca Panapark (Consoricio Industrial de Las Américas, SA – COINLA)	fifteen	Active
5	Free Zone of the Americas (Mi Morocho SA)	8	Active
6	Margarita Island Free Zone  (Margarita Island Development, Inc.)	8	Active
7	Davis State Free Zone (Administrative Unit of Reverted Assets)	5	Active
8	Zona Franca de Chilibre (Expert Diesel, SA)	5	Active
9	Free Zone Colon Maritime Investor (Colón Maritime Investor, SA)	4	Active
10	Zona Franca del Istmo  (Zona Franca del Istmo SA)	two	Active
eleven	Zona Franca Eurofusión (Eurofusión, SA)	one	Active
12	Zona Franca Cobol Due  (Cobol Due, SA)		In development
13	Zona Franca Espanam (Espanam Iberoamérica SA)		In development
14	Export Pacific Panama Free Zone (Export Pacific Panamá, SA)		In development
fifteen	Framorco Free Zone (Francisco Javier Morales Gerbaud)		In development
16	Logistics Zone of Tocumen Airport ( Tocumen   International Airport, SA)		In development

Types of companies

There are different types of companies within these free zones, and they are devoted mainly to activities such as: hi-tech, goods processing, assembly, manufacturing and the following services: logistics, research, health, environmental, education and general services. 

The Ministry of Commerce and Industries (MICI) is in charge of giving the corresponding licenses:

1. Licence as Free Zone Operator or Developer.
2. License as a Company, authorized to settle and operate within a FTZ. 

Benefits

There are many tax benefits as far as direct and indirect taxes, fees and charges are concerned. Developers are exempt from income tax in lease and sublease. Raw materials, semi-finished products, purchase and import of building materials, spare parts, tools, accessories, machinery and any services necessary for the operation are exempted from taxes and import duties.

There is a total 100% of tax exemption for logistic, high-tech, general service and health and environmental companies as well as for higher education and scientific research centres.

In addition, in order to provide more flexibility than other companies there are special labour conditions such as: paid overtime (with a surcharge of only 25% on wages), agreement on the holiday period, rotation of workers, surcharge of 50% on wages when working on holidays or national mourning days.

There is also a special regime of immigration. There is the possibility of getting a Permanent Resident Permit as an investor, Temporary Resident Permit as an expert or executive, which is only valid for the term of the contract, Short Stay visa for both traders and investors (valid for nine months, which allows the bearer to carry out business in the export zones), Temporary Permits for specific activities such as investigators of a scientific research centre or teachers, students or researchers of a higher education centre. The Permits can be extended to the immediate family of the principal applicant (including spouse, children and elderly relatives).